The National Party says the resignation of besieged Immigration Service head Mary-Anne Thompson is not the end of the affair and many questions remain unanswered.

Her boss Labour Department chief executive Christopher Blake announced today that Dr Thompson's last day had been yesterday, she would not work notice and would receive her legal entitlements under her contract.

Dr Thompson has been at the centre of a controversy over preferential treatment given to residence applications from her relatives in Kiribati.

"In the interests of the department and the wider public service, Ms Thompson has decided to resign from her position," Mr Blake said.

In an internal email, Mr Blake told staff he hoped the resignation would bring an end to the matter but warned them not to talk to the media.

"While this decision brings a degree of closure to these matters, I expect public scrutiny will continue around this and wider organisational issues," he said.

"I will be making no further public comment about the resignation, and I remind you to refrain from making any comment or speculation on this matter to persons outside the department, especially to journalists."

National's immigration spokesman Lockwood Smith said Mr Blake was mistaken if he thought the resignation brought any closure.

"Labour has still not answered any key questions in relation to those allegations, and the subsequent departmental cover up," Dr Smith said.

Dr Thompson helped family members from Kiribati complete New Zealand residence forms and an inquiry discovered that immigration officials were instructed by managers to override policy when dealing with them.

The State Services Commission is currently investigating how the applications were approved and how the case was handled.

A previous investigation, by former justice secretary David Oughton, resulted in Dr Thompson being counselled.

Three family members were granted residency despite the application being too late and the quota for Kiribati being filled.

A staff member was reprimanded for approving the application without the correct authority, but Dr Thompson was found not to have been involved.

Dr Smith said immigration ministers - past and present - should say when they found our about the issue.

He said the current minister Clayton Cosgrove had dismissed the issue as an operational matter.

"The reality is the first inquiry implicated other managers, and revealed a culture where staff have come under pressure to approve immigrations applications that fall outside the rules," Dr Smith said.

Unless ministers answered questions about the issues, confidence in the service would still be compromised.

Mr Cosgrove's spokeswoman told NZPA it was an operational employment matter and he would not be commenting.

Dr Thompson had been a high flier in the public service holding senior positions in Treasury and the Department of Prime Minister and Cabinet.

Former Immigration Minister Aussie Malcolm told Radio Live that the issue was not with officers in the service, but senior staff.

"The Immigration Service is the people that produced officers who said `no, we don't want to do this, it's wrong'."

"The Immigration Service is the organisation which has been seething with discontent over this problem. They know it's not right, and they don't like it."

It was not corruption in the legal sense.

"This is the old Biblical corruption where power corrupts and absolute power corrupts absolutely, it's not corruption in the sense that money changed hands...it's simply inappropriate action by a boss.